First I thought a recent xorg update was just not recognising the trackpad and mouse buttons on the Acer Aspire1. Then I thought something was wrong with the Emdebian Grip installation of Squeeze, then I tried upgrading the kernel to 2.6.30 and just now I tried a Graphical Rescue Mode boot of the Lenny Debian Installer.
The trackpad is non-responsive, the mouse buttons are non-responsive. The trackpad still shows up in various system messages but simply doesn't move the pointer or activate any menus. Keyboard shortcuts still work but no mouse. (I gave away my USB mouse but I guess that's the next test.)
Could this be something other than the hardware failure that it appears?
This happened to me on my old Toshiba laptop a few years ago. Drove me _nuts_, because like you, I rebooted, pulled the battery, upgraded, checked BIOS, tried rescue disks, etc. A USB mouse worked fine, IIRC, but the on-board trackpad seemed *dead*. Then I hit the hotkey, and suddenly I had a mouse again.
I'm pretty certain this is some low-level sw toggle that sits below the OS, which explains why nothing that high up seems to do anything. Worse: on my current Acer AspireOne, I use the "windows" key w/ F-keys to switch desktops. And *that* is right next to Fn...
Keyboard, touchpad, charger and flash in AAO are connected to embedded controller WPCE775L. It can interpret any keyboard/touchpad IO before it forwards it to the CPU. It also provides a fail-safe bios upgrade: if certain keys are held during powerdown it will automatically read bios upgrade from USB storage device and flash the bios with it. (I guess this is implemented so that the EC actually sends the CPU the upgrade code and the CPU accesses USB, not the EC itself).
The cr16 instruction set used by the EC is supported by binutils.